More than half of brokers are troubled that the Royal Commission’s probe on banking misconduct will negatively impact their public image, according to a recent survey by MyState. Of that figure, over a third (34.2%) said they were "seriously concerned" (34.2%), while 31.6% said they were “moderately concerned.
The Royal Commission's wrapped up its first round of public hearings 23 March, which focused on fraudulent practices in the financial services—including residential mortgages, car finances, and credit cards.
Case studies for residential mortgages tackled fraudulent loan applications, fraudulent brokers and broker arrangements, and accreditation of brokers and broker arrangements.
Lending standards split broking community
The survey also revealed brokers’ sentiments on ASIC "shining a spotlight” on the industry’s lending standards.
More than a third (37%) of respondents support greater scrutiny by the regulator, while 17% believe that the greater focus was “unfortunate” and ”self-inflicted” because of rogue mortgage brokers who have damaged the industry's reputation.
Over a quarter (28%) considered the action as “political exercise designed to benefit non-broker interests,” and 35% remain undecided whether it will negatively affect broker reputation.
Regarding media speculations that the Royal Commission’s probe and the Productivity Commission’s draft report could lead to changes in broker commission towards a fee-for-service model, 42% think it's unlikely, 33% said it was “evenly balanced”, and 23% think it's a “strong possibility”.
Survey reveals a desire for change
The survey also revealed brokers’ passion about improving industry standards, according to MyState executive broker distribution Huw Bough
“The Royal Commission has attracted a lot of attention recently, but it must also be acknowledged that well before the commission began representatives of Australia’s mortgage broking industry prepared a landmark reform package to improve customer outcomes and confidence in mortgage broking,” he said.
The reform package, prepared well before the Royal Commission began its probe, resulted from the collaboration between industry bodies, lenders, brokers, aggregators and consumer groups through the Combined Industry Forum.